Evolving consumer protection standards

Looking ahead to 2026, the UK stands at an inflection point. Regulatory authorities have aligned behind a shared mission: scaling growth safely to deliver competition, resilience and consumer confidence in equal measure.

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The last decade was defined by user-facing innovation: frictionless onboarding, slick interfaces and ever-faster transactions. The next phase looks different. Infrastructure looks set to be the driver of change.The UK’s National Payments Vision, CHAPS and Faster Payments reforms, and the creation of a Retail Payments Infrastructure Board all point to a system-wide focus: fixing the rails so that account- to-account payments, open banking and future digital-money forms can operate at scale.

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Yet, despite the apparent softening in regulatory attitudes - the extension of the FCA’s pre-application support services to payment and crypto firms, the proliferation of new testbeds ranging from the Digital Securities Sandbox to exploratory pilots in Artificial Intelligence and Open Finance, and HMT’s endorsement of the National Payments Vision – there remains a clear tension between rhetoric and action.

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Standards at the gateway remain (rightly) high. The new safeguarding regime, coming in to force in May 2026, introduces prescriptive requirements - codifying supervisory expectation. And the forthcoming crypto and stablecoin framework will be brought within the FSMA perimeter rather than through a separate bespoke regime. These developments reflect a regulator determined to convert principle in to process, and outcomes into evidence. Supervision is likely to remain focused on improving outcomes for consumers and strengthening there silence of the UK’s financial sector. Tackling financial crime, proactive anti-fraud measures, effective governance arrangements, operational resilience, and agent oversight look set to dominate supervisory conversations. Firms which present a mature and proactive approach to risk management may however notice a shift in supervisory tone - moving from assertive supervision to proportionate collaboration.

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This apparent tension, between a pro-growth agenda and heightened consumer protection, is in truth a mark of regulatory maturity. It reflects a regulator comfortable with innovation, but no longer willing to rely on promises of good practice. The message is clear: show us the data. In that sense, the UK is moving into a phase of “proof-based regulation” - principle-led; but rooted in measurable outcomes. Elsewhere, the trend is mirrored. The EU’s PSD3 and Instant Payments Regulation push consumer protection into the operating code of the market. In the GCC, new Open Finance and stablecoin regimes in the UAE, Bahrain and Saudi Arabia are pairing licensing liberalisation with prescriptive operational standards. Regulation is maturing alongside the market itself.

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2026 will reward those able to evidence that growth and good governance can co-exist. That new technologies are not only faster and/or cheaper - but safer, more transparent, and capable of scaling on the stronger foundations now being built.

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The maturing regulatory framework is not a brake on innovation; it is its enabler. The firms that thrive will be those that recognise the new alignment between growth, protection and infrastructure - and can show how their products deliver all three.

As we approach 2026, I think consumer protection will emerge as one of the key compliance themes across the payments economy. The heightened regulatory scrutiny is driven primarily by the proliferation of AI-driven financial products, as well as increasingly empowered consumers.

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I think within consumer protection, the key focus would be the question of fairness, of transparency and of accountability. In the Asia Pacific region, we are already seeing initiatives like the Monetary Authority of Singapore’s push for responsible use of AI in the financial sector and its push to require all financial institutions to ensure customers receive fair treatment. The Australian Securities and Investments Commission has also recently tightened product suitability requirements by focusing on design and distribution obligations which require product issuers to ensure products are distributed to consumers who are within the defined target market. Enforcement actions like the Australian Unity case show that regulators are serious about enforcing any breaches.

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In 2026 these principles will likely converge into more common global expectations. This means that financial firms must not only comply with the rules or principles behind those rules, they must also demonstrate outcome-based fairness. Firms have to ensure consumers truly understand what they are buying, how their data is being used and all the risks that are involved.

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One key challenge will be on the opacity of the algorithms in consumer decision-making. As AI increasingly power customer interactions, firms will face growing pressure to explain, to audit and to justify these outputs. Regulators may require independent validation of AI models that influence consumer outcomes. This presents both a compliance challenge and an opportunity for firms that can operationalize ethical AI governance.

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Another emerging challenge is on data-driven personalization. While consumers want bespoke experiences, the boundary between personalization and manipulation grows ever so thinner. Regulators may require firms to adopt privacy-by-design frameworks and clearer consent management practices. There will be an opportunity for firms that can embed consumer protection at the core of its strategy.

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As always is the case, the challenge for firms will be about balancing innovation with control. Traditional compliance frameworks are often static while AI evolve continuously. There will be an increase in calls for dynamic compliance, where firms embed continuous monitoring, automated alerts and explainable decisioning.

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Ultimately I think in the near future, we will see a shift from viewing compliance as an obligation to embracing compliance as a foundation of trust. Firms that embrace the mindset where safeguarding consumer interest is integral to their brand value will not only stay ahead of regulation, but also build a competitive advantage.